China's environmental protection tax will go into effect on January 1, 2018, domestic media reported on Monday.
The tax will raise an estimated 50 billion yuan ($7.2 billion) a year, according to the financial news website cs.com.cn.
Legislators approved the Environmental Protection Tax Law at the end of the 25th session of the 12th National People's Congress (NPC) Standing Committee meeting in Beijing on Sunday, according to the NPC's website.
The law provides guidelines for how much tax companies will have to pay for emitting different types of pollutants. For example, factories will have to pay taxes ranging from 1.2 yuan to 12 yuan for each atmospheric pollutant they emit.
The law also clarifies the taxation basis, which will be determined according to the respective pollution equivalent value. For example, the pollution equivalent value for mercury in water is 0.0005 kilogram.
China first established a pollutant management system back in 1979. From 2003 to 2015, the country has levied 211.6 billion yuan in taxes from 5 million enterprises and companies for emitting pollutants, the Xinhua News Agency reported on Monday.
After the law takes effect, companies and factories will pay about 50 billion yuan in taxes every year, cs.com.cn noted, citing an estimate by the Central University of Finance and Economics.